Manila Electric Company (MERALCO) announced today another downward adjustment of power rates, as the overall rate for a typical household decreased by P 0.0216 per kWh, from last month’s P 8.7468 per kWh to P 8.7252 per kWh this June. This is equivalent to a reduction of around P 4 in the total bill of residential customers consuming 200 kWh.
With three straight months of generation rate reduction, and a total rate decrease of more than one peso per kWh since the start of the year, this month’s total rate is also significantly lower than that of June 2019, which was P 10.0918 per kWh. This month’s total rate is also the lowest since February 2018.
Lower generation charge as MERALCO claims force majeure
From P 4.3848 per kWh last May, the generation charge decreased by P 0.0435 per kWh to P 4.3413 per kWh this June.
Because of the very significant reduction in power demand in its service area during the Enhanced Community Quarantine (ECQ) and Modified ECQ period, MERALCO invoked the Force Majeure provision in its Power Supply Agreements (PSAs) for the duration of the lockdown, reducing fixed charges for generation capacity that would have been charged by suppliers. This June, the Force Majeure claim totaled P614 million, equivalent to customer savings of P0.2208 per kWh, representing reduction in fixed costs from its baseload supply contracts and avoided charges from the temporary suspension of the mid-merit supply contracts recently approved by the Energy Regulatory Commission (ERC). Without the FM claims, generation charge and the total rate would have increased by 18-centavos and 24-centavos, respectively, from last month’s rate. For the past 3 months, the savings due to Force Majeure claims totaled around P1.6 billion.
PSA charges decreased by P 0.0613 per kWh mainly due to MERALCO’s Force Majeure claim. Cost of power from Independent Power Producers (IPPs) also decreased by P 0.2334 per kWh due to higher average plant dispatch. PSAs and IPPs accounted for 50.4 percent and 47.1 percent of MERALCO’s total supply, respectively.
Meanwhile, charges from the Wholesale Electricity Spot Market (WESM) increased by P 0.3132 per kWh due to tighter supply conditions in the Luzon grid mainly due to higher incidents of plant outages and slight increase in demand. The share of WESM to MERALCO’s supply needs was only at 2.5 percent.
Movements in other charges
Other pass-through charges registered an increase of P 0.0219 per kWh. This was mainly due to the resumption of the P 0.0495 per kWh Feed-In-Tariff Allowance (FIT-All). The ERC suspended the collection of FIT-All for April and May billing months in consideration of the ECQ. Meanwhile, ERC suspended the collection of Universal Charge-Environmental Charge amounting to P 0.0025 per kWh beginning this June, until further notice.
MERALCO’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 59 months, after these registered reductions in July 2015. MERALCO reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges like the Universal Charges and the FIT-All are remitted to the government.
MERALCO keeps its doors open for customers during GCQ
Customers may visit their nearest Meralco Business Center, which will continue to open its doors during the ongoing GCQ, and accept service applications, payments, and other transactions.
Strict safety measures continue to be implemented, like the “No Mask, No Entry” rule, Social Distancing and Temperature Check. Frontliners are available and ready, but strictly follow Social Distancing guidelines. Visitors can rest assured that these frontliners have passed the rapid COVID-19 testing authorized by the Pasig City Health Office. There are also acrylic barriers set up in the Meralco branches to protect both the customer and the frontliner.
But, for maximum safety and convenience, Meralco still encourages customers to use Meralco Online to transact from the safety of their homes. Multiple options for transactions have also been offered by the distribution utility, including the Meralco Mobile App via onelink.to/meralcomobile, Meralco Online via www.Meralco.com.ph, and the Meralco authorized payment channels at bit.ly/MeralcoPaymentPartners.